Discrete industries’ automation buy to exceed $38 billion

12/22/2005


Dedham, MA —Last year’s over-$27 billion worldwide automation-market for discrete industries was succeeded by even more robust growth in 2005 as the global economy expanded with heightened demand from various emerging areas. The overall automation market for the discrete industries is expected to grow at a compound annual growth rate of 7% over the next five years. The market is forecast to exceed $38 billion in 2009, according to a new ARC Advisory Group study. During the forecast period, emerging markets are driving growth in traditional hardware-based products, such as PLCs and ac drives. Production management software is growing very rapidly due to its early product lifecycle-phase; and market demand for enterprise integration and real-time information from plant equipment regarding material location and tracking remain strong. System integration services are also providing modest growth in the worldwide discrete automation market.

Manufacturing companies increased automation equipment spending to set up new plants in Asia and expand production capacities globally. A primary factor contributing to market growth during the next five years is continued globalization and resulting infusion of capital for automation in many industries and regions. “Although overall capital expenditures have remained flat in previous years, globalization is causing manufacturers to increase automation investments to drive down costs and raise the quality of their products,” according to senior analyst Himanshu Shah, principal author of ARC’s report, Total Automation Business for Discrete Industries—Worldwide Outlook.”

China continues to be the primary country driving automation market growth, while India is seeing increasingly bright prospects for automation. Most Asian countries’ end-users continue to build new infrastructure, expand manufacturing bases, and modernize many existing plants with less sophisticated or limited automation. New dynamics in Japan also drove an unexpected resurgence, returning to higher growth rates after many years of lagging performance.

Eastern Europe is experiencing a surge in automation investment with increased consumer demands due to rising real wages in a number of countries, and a stabilizing labor market.

New activities in the OEM machine builders segment are pushing high growth in Latin America.

Various industries’ manufacturing has become more challenging due to expanding product variations, increasing production speeds, and rising quality requirements at every stage of the production process. And manufacturers increasingly demand the use of open standards for interoperability, multi-control discipline functionality to reduce cost of integration, Ethernet-based network technology, and modular architecture for scalability.

Richard Phelps , senior editor, Control Engineering





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